Deep in the heart of America's tobacco country, in the city of Richmond, Virginia, strange new products called Cigaletts have appeared on shop shelves. About the size of Smarties, Cigaletts are tablets of powerful compressed tobacco that melt gently in the mouth. These "smokeless cigarettes" taste minty but provide a nicotine kick several times the strength of a smoke.

Cigaletts are the invention of Star Scientific, an unorthodox Virginia tobacco firm. Depending on whom you ask, Star Scientific is the world's first ethical tobacco company or a devious, cunning organisation with a mission to corrupt children. The firm is test marketing Cigaletts in Virginia and Texas, and claims to have snatched a 6% share of the tobacco market in its target shops after one month.

Oral tobacco is nothing new: Scandinavians, in particular, have been munching it for years. Skoal Bandits were briefly notorious in Britain before being banned on health grounds. But Star's Cigaletts are different: for a start, their packaging is disarmingly honest. A large warning on the packs reads: "There are no safe tobacco products. Quitting or not starting is your best option."

Cigaletts have fewer known toxins than chewing tobacco. Star claims it has found the holy grail: a way of freezing out cancer-causing nitrosamines from tobacco leaves. Under a process described as StarCuring, the company believes it can reduce the nastiness of tobacco without detracting from the taste or the nicotine hit.

From its base in Chester, Virginia, Star boasts a mission statement to "lessen the destructive impact on human life wrought by tobacco smoking".

'Totally ignorant'

Star's chairman, Paul Perito, describes the firm as a "technology-oriented tobacco company with a toxicity-reduction mission". Mr Perito is a lawyer who served in the early 70s as President Nixon's "drugs tsar". Unlike most tobacco barons, he has never smoked a cigarette and proudly declares that his three children are non-smokers.

On a visit to London this month, he spoke hopefully of a world without smoking: "It's highly unlikely in my lifetime but hopefully in your lifetime, we'll have a smoke-free world."

Many big players in the tobacco industry still cling to a claim that tobacco is not addictive. Imperial Tobacco, British American Tobacco and Gallaher all quibble about the term "addictive", pointing out that smokers can quit if they try hard enough. Mr Perito is scornful of his rivals: "Any tobacco executive who maintains that nicotine is not addictive is either bereft of his or her senses or is totally ignorant."

Among critics of the tobacco industry, Star attracts polarised views. The firm is at the centre of a debate about whether it is possible for a company to manufacture and sell tobacco in an ethical way.

Clive Bates, director of the pressure group Action on Smoking and Health, hails Star as a pioneer: "I take them very seriously. Paul Perito and his fellow directors are some of the most determined people I've ever met.

"The concept they have is a good one: they want to develop less harmful technologies and license them to companies which take them up either due to regulatory pressure or market pressure."

A tireless campaigner against tobacco, Mr Bates says the debate has moved on from a view that the weed should simply be banned worldwide. "There is quite a large number of people whereby there is quite a low chance that they'll ever give up," he says. "For example, 80% of schizophrenics are smokers. There are suggestions that they smoke to relieve their symptoms. You have to ask: If they're going to continue smoking, can they do it in a less harmful way?"

Others are not so sure. The attorney general of Connecticut, Richard Blumenthal, recently attacked Cigaletts as a "candy", saying: "It's a very dangerous gimmick from a company that has proved itself completely devious and cunning in targeting children and deceiving the public."

Star says its aims are to produce less harmful tobacco products and to market it in a unique way - eschewing "Joe Cool" image-based promotions, in favour of supplying the least worst product to proven addicts.

This is a world away from the world's largest tobacco firms, which have only grudgingly come round to an admission that smoking is harmful.

Gallaher, producer of Silk Cut and Benson & Hedges, says: "It must be clear to all that a real health risk exists. People who choose to smoke are more likely to contract certain diseases than those who do not smoke." However, like others, it has no hesitation in advertising and promoting its products, claiming that it is merely fighting for market share from rivals rather than seeking to recruit new smokers.

Received opinion in the tobacco industry is that the search for a healthier cigarette is a waste of time. Most attempts to kill the carcinogenic chemicals in tobacco have ended up killing the taste. Combusting a tobacco leaf produces 4,000 chemicals, of which 43 are pharmaceutically active. Targeting the dangerous ones is tricky.

The central problem is that the green leaves of tobacco plants suck nitrogen out of the soil. Once combusted, these nitrates react with alkaloids in the plant to become TSNAs - tobacco-specific nitrosamines - which can cause cancer. Previous attempts involved microwaving the leaves to kill the TSNAs. Star has developed a way of using convection heating and drying which vastly reduces the TSNAs without harming the taste.

It has already persuaded Brown & Williamson, the US arm of BAT, to buy its low-TSNA tobacco. Star has also introduced a brand of snuff, Stonewall, which it claims has 495 times fewer toxins than rival Skoal.

Many anti-smoking groups recognise that oral tobacco could be a form of compromise in the health debate. At the very least, it eliminates the risk of passive smoking. For confirmed addicts, it is a way of achieving a nicotine high in offices or restaurants - which, particularly in the US, are no-smoking areas.

Some hardliners maintain that eradicating tobacco worldwide is the only long-term solution. Mr Perito urges a middle way: "There's nothing inconsistent about wanting cessation and producing a less harmful product."

He believes that tobacco is ingrained too deeply in the American way of life to be eradicated soon. "Don't forget, we financed our war of independence against the British with a loan from the Dutch collateralised on 5m lbs of Virginia tobacco."